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Goodbye to the Misery Industry

During the World Economic Forum’s annual meeting, participants are encouraged to join in “world economic brainstorming,” where groups are chosen …

During the World Economic Forum’s annual meeting, participants are encouraged to join in “world economic brainstorming,” where groups are chosen at random to sit at table with a designated chairman for three 25-minute session with international politicians of note. Part of the fun is the mystery of who will be selected to join your group, this process also being random based on the politicos who sign up. One of the three to join my table was U.S. Commerce Secretary Bill Daley, who did his best to respond to queries from several European business leaders about “America‘s growing gap between the rich and poor.”

The next time Daley or anyone finds himself under such fire, I recommend Myths of Rich and Poor by W. Michael Cox and Richard Alm. Cox, a senior VP and chief economist with the Federal Reserve Bank of Dallas, does not minimize the country’s genuine problems, but demonstrates how a Rip van Winkle who fell asleep in 1970 would 25 years later find a world distinctly at odds with the bad news stories (see table).

While material wellbeing is but one metric, it’s interesting, for example, to note that 97 percent of households officially in poverty own color TVs, two-thirds live in air-conditioned buildings, three-fourths have VCRs, and 41 percent own their homes. Cox also points out that the hours of an average work week have fallen. “Our grandparents… in 1890 worked 60 hours and would look at 40 hours as part time,” he says. Citing University of Michigan data, Cox reports that people actually work six to seven hours less per week while the Internet, e-mail, errands, and doctor visits clip corners of the day.

Mobility is also alive and well. Three-fourths of the people in the bottom quintile of income distribution in 1970 had moved to the third, second, and top quintiles by 1991. Only 5 percent stayed behind. Cox concedes that his research does not address, say, the quality of time parents spend with their kids. “I didn’t write the book to say, things are good whether you like it or not,” says Cox. “I wrote it to say to those who think they need the next thing in order to be happy-well, you’ve got so much more stuff than you had in 1970. If you’re not happy, then maybe you should start looking for your happiness somewhere else

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